President Joe Biden’s administration will forgive another $1.2 billion in student loan debt for almost 153,000 individuals.
The Saving on a Valuable Education (SAVE) repayment program is for borrowers repaying student debt for at least ten years and have taken on $12,000 or less in debt. The White House announced on Wednesday that this plan, which is its most recent debt-forgiveness initiative, will benefit participants in this program.
According to the White House, community colleges and other borrowers with smaller loans will particularly benefit from this shortened time to forgiveness and put many on the fast track to being free of student debt.
According to a budget model developed by the Wharton School of the University of Pennsylvania, the SAVE plan, an initiative started by the White House in August, will increase the options for income-based student loan repayment at an estimated cost of $475 billion over ten years. The SAVE plan prohibits borrowers’ student loan balances from rising due to delinquent interest payments and offers student loan forgiveness after making at least ten years’ worth of expenses.
Throughout his administration, President Biden has used more than twenty-four executive actions to eliminate nearly $140 billion in student loan debt for roughly almost 4 million borrowers, according to the White House.
President Biden’s executive order to forgive up to $20,000 in student loan debt for borrowers earning less than $120,000 annually was overturned by the Supreme Court in June. The Biden administration invoked the HEROES Act to support its authority to forgive millions of Americans’ student loan debt unilaterally.
Shortly after the Supreme Court’s decision, Biden unveiled a strategy to get around it by canceling student loans using different methods. Rather than the HEROES Act, his new student debt plan will be based on the Higher Education Act.
After being suspended for several years due to the COVID-19 pandemic, federal student loan payments were again made available in October. The bipartisan debt-ceiling agreement passed in June included a clause that barred the Biden administration from prolonging the suspension of student loan payments.
According to the White House, the administration has now used executive actions to erase about 3.9 million people’s $138 billion in student debt.
